Walsh,
J:—This
action
concerns
liability
for
succession
duty,
and
the
valuation
for
succession
duty
purposes
of
a
property
in
Côte
St-Luc,
being
Lot
No
101
of
the
cadastre
of
the
Parish
of
Montreal,
and
is
governed
by
the
provisions
of
the
Dominion
Succession
Duty
Act,
RSC
1952,
c
89,
as
amended,
which
is
applicable
to
estates
devolving
as
the
result
of
the
death
of
any
person
before
the
coming
into
force
of
the
Estate
Tax
Act,
SC
1958,
c
29.
The
deceased
herein,
Félix
Goyer,
died
in
Outremont,
Quebec
on
May
16,
1956
and
in
the
return
filed
with
respect
to
his
estate
showing
net
assets
of
$752,438.47,
the
property
in
question
was
given
a
value
of
$90,000.
An
assessment
was
made
on
July
4,
1957,
establishing
the
net
value
of
$949,969.69,
the
property
in
question
having
been
increased
by
$110,000
to
a
value
of
$200,000.
On
March
14,
1958
a
new
assessment
was
issued
by
the
Minister
establishing
the
net
total
value
of
the
estate
at
$941,424.70
and
this
was
increased
by
$400,000
by
another
new
assessment
on
January
14,
1960
as
a
result
of
an
increase
in
the
valuation
of
the
said
Lot
101
to
$600,000,
resulting
in
duties
being
claimed
in
the
amount
of
$340,589.85.
Finally,
on
August
31,
1964
the
Minister
by
virtue
of
a
decision
made
under
section
38
of
the
said
Dominion
Succession
Duty
Act,
reduced
the
value
of
Lot
No
101
to
$525,000,
ratifying
the
assessment
which
had
been
appealed
against
in
all
other
respects.
The
issue
arises
out
of
the
interpretation
of
certain
clauses
in
the
deceased’s
will
made
in
notarial
form
on
December
2,
1948.
By
virtue
of
clause
7
the
deceased
left
to
his
wife:
Dame
Dolores
Dagenais,
during
her
lifetime
and
for
so
long
as
she
shall
remain
a
widow
the
enjoyment
and
usufruct
of
the
universality
of
the
residue
of
my
other
property,
movable
and
immovable,
money,
insurance
and
pending
claims
of
whatsoever
nature
which
may
form
part
of
my
estate,
and
I
excuse
her
from
the
obligation
of
giving
security
or
making
an
inventory.
[Translation]
Clause
13
read:
It
the
income
which
my
wife
enjoys
shall
not
be
sufficient
she
may
take
some
capital
and
she
shall
be
the
sole
judge.
[Translation]
The
will
left
one-half
of
the
residue
to
the
National
Research
Council
and
the
other
half
to
his
grandnephews
and
grandnieces.
The
Minister
interpreted
the
said
clause
13
of
the
will
as
constituting
a
general
power
of
appointment,
holding
that
as
a
result
of
it
the
widow
(hereinafter
referred
to
as
Dame
Dagenais)
was
reputed
to
have
inherited
all
the
assets
of
the
deceased
by
virtue
of
subsection
3(5)
of
the
Act,
whereas
plaintiff
contends
that
it
did
not
constitute
a
general
power
of
appointment
as
the
right
to
take
the
capital
was
limited
in
that
Dame
Dagenais
could
only
use
it
if
her
income
was
insufficient,
which
was
not
the
case,
and
that
she
could
not
dispose
of
the
capital
of
the
succession
by
will.
It
will
be
convenient
at
this
stage
to
quote
some
of
the
sections
of
the
Dominion
Succession
Duty
Act
which
were
referred
to
by
the
parties
and
have
some
bearing
on
the
matter:
2.
In
this
Act,
(a)
“aggregate
net
value”
means
the
fair
market
value
as
at
the
date
of
death,
of
all
the
property
of
the
deceased,
wherever
situated,
together
with
the
fair
market
value,
as
at
the
said
date,
of
all
such
other
property
wherever
situated,
mentioned
and
described
in
section
3,
as
deemed
to
be
included
in
a
succession
or
successions,
as
the
case
may
be,
from
the
deceased
as
predecessor,
after
the
debts,
encumbrances
and
other
allowances
are
deducted
therefrom
as
authorized
by
subsection
(9)
of
section
7
and
by
section
8;
3.
(1)
A
“succession”
shall
be
deemed
to
include
the
following
dispositions
of
property
and
the
beneficiary
and
the
deceased
shall
be
deemed
to
be
the
“successor”
and
“predecessor”
respectively
in
relation
to
such
property:
(i)
property
of
which
the
person
dying
was
at
the
time
of
his
death
competent
to
dispose;
(4)
Where
a
deceased
person
had
at
the
time
of
death
a
general
power
to
appoint
or
dispose
of
property,
there
shall
be
deemed
to
be
a
succession
in
respect
of
such
property
and
the
person
entitled
thereto
and
the
deceased
shall
be
deemed
to
be
the
“successor”
and
“predecessor”
respectively
in
relation
to
the
property.
(5)*
Notwithstanding
anything
in
this
Act,
where
(a)
a
general
power
to
appoint
property,
either
by
instrument
inter
vivos
or
by
will,
or
both,
is
given
to
any
person,
and
(b)
that
property
is,
by
virtue
of
some
other
provision
of
this
Act,
included
in
a
succession,
the
succession
in
respect
of
that
property
shall
be
deemed
to
be
to
the
person
to
whom
the
power
was
given,
and
that
person
and
the
deceased
shall
be
deemed
to
be
the
“successor”
and
the
“predecessor”
respectively.
On
September
22,
1949
the
deceased
made
a
codicil
to
his
will
in
holograph
form
whereby
he
revoked
“articles
A
and
B’’,
(which
from
the
context
of
the
codicil.
evidently
was
intended
to
refer
to
subsections
(a)
and
(b)
of
clause
8
and
not
to
subsections
A
and
B
of
clause
13,
dealing
with
general
powers
of
the
executrix,
as
both
parties
agree).
The
said
clause
8(a)
and
(b)
which
was
revoked
had
provided
that
at
the
termination
of
the
usufruct
one-half
of
his
estate
would
go
to
the
National
Research
Council
for
study
bursaries
to
be
designed
as
“Félix
Goyer
Prizes”
or
for
the
construction
of
a
research
institute
to
bear
the
name
“Félix
Goyer”,
and
the
other
half
to
his
grandnephews
and
grandnieces,
subject
to
a
pre-taking
of
$10,000
by
his
grandniece
Marguerite
Pepin.
The
codicil
reiterated
that
his
wife
was
administrative
trustee
and
usufructuary
of
his
estate,
and
in
place
of
the
revoked
clauses
dealing
with
the
distribution
of
the
assets
at
the
termination
of
the
usufruct
provided
“At
her
death
these
assets
shall
be
distributed
as
she
desires
between
the
grandchildren
of
my
sister
Victoria
and
philanthropic
works,
study
and
research
bursaries,
and
hospital
works
bearing
my
name”
(translated).
On
March
24,
1959,
some
three
years
after
her
husband’s
death,
Dame
Dagenais
was
authorized
by
judgment
of
the
Superior
Court
to
renounce
for
reasons
of
ill-health
her
responsibilities
as
testamentary
executrix,
trustee
and
administrator
of
the
estate,
reserving
her
right
to
name
the
beneficiary
heirs
in
accordance
with
the
provisions
of
the
codicil,
which
faculty
of
appointment
was
said
to
attach
to
her
quality
of
wife
and
usufructuary.
On
April
29,
1959,
by
deed
in
notarial
form
she
formally
renounced
as
authorized
by
the
said
judgment
her
responsibilities
as
testamentary
executrix,
trustee
and
administrator,
naming
the
General
Trust
Company
of
Canada
to
replace
her,
reserving,
however,
her
usufruct
‘‘and
especially
the
right
to
take
capital
from
the
assets
of
the
estate
of
her
late
husband
the
said
Félix
Goyer
in
the
event
of
insufficiency
of
income,
the
whole
as
stated
in
the
said
will,
and
being
the
sole
judge
of
this”
(translated).
By
further
notarial
deed
dated
December
18,
1959
Dame
Dagenais
named
the
beneficiaries
of
the
estate
of
her
husband,
distributing
$120,000.
equally
among
the
12
grandchildren
of
deceased’s
sister
Victoria,
$50,000
to
the
Religieuses
Soeurs
Hospitalières
de
St-Joseph
de
l’Hotel
Dieu
de
Montreal
to
be
used
for
medical
research
especially
in
cardiology
to
perpetuate
the
name
of
Félix
Goyer,
with
all
the
residue
to
go
to
the
Félix
Goyer
Foundation,
a
charitable
corporation
established
on
September
18,
1958
with
the
desire
that,
to
carry
out
the
wishes
of
the
late
Félix
Goyer,
the
funds
should
be
used
for
study
and
research
bursaries
in
science
especially
for
farmers’
sons,
philanthropic
works
for
invalids
especially
epileptics,
paraplegics
and
cerebral
palsy
victims,
and
medical
and
hospital
work
especially
in
the
field
of
cardiology
as
a
result
of
the
illness
from
which
the
late
Félix
Goyer
suffered.
In
the
same
deed,
Dame
Dagenais
made
a
declaration
to
the
effect
that
with
respect
to
the
exercise
by
her
of
the
right
to
use
capital
of
the
estate
in
the
case
of
insufficiency
of
revenues,
of
which
she
was
to
be
the
sole
judge,
and
considering
the
prospective
revenue
coming
from
the
estate
following
the
sale
of
the
Côte
St-Luc
property
subsequent
to
her
resignation
as
Executrix,
she
had
no
intention
and
did
not
wish
in
the
future
to
claim
any
sum
from
the
capital
of
the
estate
for
so
long
as
the
income
from
it
exceeded
$30,000
a
year,
and
that
in
any
event
she
would
not
claim
any
amount
exceeding
$1,000
a
month
or
$12,000
a
year
even
if
this
became
necessary
as
a
result
of
an
eventual
diminution
of
the
income
of
the
estate
to
which
she
had
a
right
as
usufructuary.
This
latter
declaration
can,
in
my
view,
have
no
effect
on
the
liability
of
the
estate
for
succession
duties
as
these
must
be
determined
on
the
basis
of
the
situation
as
it
existed
at
the
date
of
death
and
nothing
done
by
Dame
Dagenais
thereafter
could
increase
or
diminish
in
any
way
the
liability
of
the
estate
for
such
duties.
The
proof
did
reveal
that
neither
before
nor
after
this
notarial
deed
had
Dame
Dagenais
ever
infringed
on
the
capital
of
the
estate.
What
has
to
be
determined,
however,
is
whether,
as
a
result
of
the
wording
of
the
will,
she
was
given
a
general
power
of
appointment
so
that
the
entire
estate
should
be
taxed
as
if
it
had
devolved
to
her.
A
second
issue
arose
with
respect
to
the
valuation
of
the
Côte
St-Luc
real
estate.
An
option
allegedly
dated
May
16,
1956
on
the
first
page
and
May
17,
1956
(the
day
after
the
deceased’s
death)
on
the
second
page,
had
been
given
to
one
S
D
Miller
for
the
purchase
of
Lot
101
and
part
of
Lot
99
containing
a
total
of
1,213,987
square
feet
at
550
a
square
foot
which
allegedly
led
to
the
value
of
$600,000
established
in
the
assessment
of
January
14,
1960.
Apparently,
the
deceased
was
not
owner
of
part
of
Lot
99
at
the
time
of
his
death
and
although
Mr
Miller
accepted
the
option
on
May
25,
1956,
he
withdrew
his
offer
on
June
15,
1956
because
of
the
error
as
to
the
ownership
of
part
of
Lot
99,
error
as
to
the
area
of
Lot
101,
and
error
as
to
the
fact
that
no
mention
was
made
of
certain
servitudes
affecting
the
property.
In
his
defence
the
Minister
denies
that
these
documents
served
as
a
basis
for
determining
the
assessment
of
August
31,
1964
with
which
we
are
now
concerned,
establishing
the
value
of
Lot
101
at
$525,000,
and
the
documents
in
question
were
not
produced
in
evidence.
Even
if
they
had
been
I
am
of
the
view
that
at
best
they
could
only
establish
what
deceased
was
asking
for
his
property
at
the
time
of
his
death,
since,
due
to
the
errors
referred
to,
there
was
no
meeting
of
the
minds
between
him
and
the
prospective
purchaser
so
it
cannot
be
treated
as
if
it
were
an
accepted
and
binding
price.
Moreover,
since
part
of
another
lot
was
involved
and
there
are
no
means
of
determining
whether
the
price
of
55c
a
foot
asked
was
affected
in
any
way
by
part
of
Lot
99
being
included
in
the
option
with
Lot
101,
I
would
not
consider
that
these
documents,
even
if
they
had
been
proved
and
if
the
Minister
had
relied
on
them
in
establishing
the
assessment,
could
be
considered
as
indicating
the
real
market
value
of
Lot
101
at
the
date
of
the
deceased’s
death.
Finally,
plaintiff
contends
that
the
Minister
abused
his
discretionary
powers
under
section
24
of
the
Act
by
first
evaluating
the
property
in
question
at
$200,000,
then
at
$600,000
and
finally
by
his
decision
of
August
31,
1964
at
$525,000,
since
nothing
had
happened
subsequent
to
the
return
filed
by
the
testamentary
executrix
which
was
not
known
to
the
Minister,
and
she
had
committed
no
fault
either
of
omission
or
commission,
so
that
the
Minister
did
not
act
with
all
possible
diligence
as
prescribed
by
section
22
of
the
Act,*
and
as
a
result
penalized
the
taxpayer
by
claiming
not
only
increased
duties
but
also
interest
from
November
16,
1956,
that
is
to
say
six
months
after
deceased’s
death.
Plaintiff
contends
therefore
that
even
if
the
Minister’s
evaluation
is
maintained
the
Court
should
use
the
provisions
of
section
45}
and
order
the
Minister
to
cancel
all
interest
from
the
period
beginning
on
the
date
when
the
duties
established
by
the
original
assessment
were
paid
up
to
the
date
when
judgment
is
rendered.
It
is
certainly
extraordinary
that
a
succession
duty
return
dated
November
14,
1956,
even
for
a
large
estate,
should
after
a
first
assessment
on
July
4,
1957
giving
the
value
of
property
at
$200,000,
have
this
value
increased
by
an
assessment
dated
January
14,
1960
to
$600,000,
which
figure
was
subsequently
reduced
by
decision
of
the
Minister
dated
August
31,
1964
to
$525,000
and
that
the
matter
should
only
come
to
Court
for
trial
in
1973,
so
after
reaching
a
conclusion
on
the
merits
I
will,
if
necessary,
then
give
consideration
to
the
question
of
interest.
Evidence
was
adduced
to
the
effect
that
the
estate
held
some
$365,100
worth
of
bonds
yielding
total
annual
revenue
of
$15,073
and
$123,900
of
other
securities
yielding
approximately
$3,000
per
annum
in
dividends
making
a
total
income
from
these
sources
of
over
$18,000.
In
addition,
the
estate
owned
property
worth
$222,000
according
to
the
evaluation
shown
on
the
succession
duty
return
which
only
placed
a
value
of
$90,000
for
the
Côte
St-Luc
property,
and
mortgages
in
ex-
cess
of
over
$40,000.
Dame
Dagenais
also
had
some
$2,500
to
$3,000
of
personal
income
so
it
appears
that
she
would
have
at
her
disposal
over
$30,000
worth
of
annual
income,
a
substantial
sum
in
1956
and
the
years
immediately
following.
Dame
Dagenais
is
now
deceased
but
a
witness
who
knew
both
her
and
her
husband
well
and
assisted
her
in
her
investments,
testified
that
they
did
not
entertain
nor
go
out
extensively.
They
had
no
children
and
except
for
taking
one
holiday
trip
a
year,
lived
quite
simply.
From
1959
on
Dame
Dagenais
was
ill,
being
partially
paralysed
and
confined
to
her
home.
One
of
her
sisters
cared
for
her
for
a
time
and
then
there
were
nurses.
Despite
this
she
never
had
to
use
any
capital.
On
the
facts,
it
is
not
difficult
to
determine
the
deceased
Félix
Goyer’s
real
intentions
as
expressed
in
his
will
and
codicil,
nor
to
conclude
that
these
intentions
were
in
fact
carried
out
by
his
widow
Dame
Dagenais.
He
evidently
felt
that
his
widow
would
be
amply
provided
for
by
the
income
from
his
substantial
estate,
but
nevertheless
did
not
want
to
exclude
the
possibility,
however
remote
it
might
be,
that
she
might,
whether
as
a
result
of
unforeseeable
diminution
in
the
income,
or
unforeseeable
increase
in
her
needs,
be
forced
to
draw
on
some
capital
in
the
event
of
the
income
not
being
sufficient,
and
he
had
sufficient
confidence
in
her
to
make
her
the
sole
judge
of
this.
He
also
desired
that
his
estate
at
her
death
should
go
partially
to
the
grandchildren
of
his
sister
Victoria
and
partially
for
philanthropic
purposes,
scientific
bursaries
and
hospital
works
to
perpetuate
his
name.
By
his
codicil
he
delegated
to
his
widow
the
right
to
make
the
specific
determination
of
the
division
of
these
assets,
which
she
in
fact
did,
but
the
distribution
made
by
her
had
to
be
for
the
purposes
which
he
had
designated
and
she
could
not
therefore
dispose
of
them
as
she
saw
fit.
Whereas
his.
original
will
had
indicated
that
one-half
would
go
for
scientific
and
educational
purposes
with
only
the
other
half
going
to
grandnephews
and
grandnieces,
the
codicil
had
the
unfortunate
result
of
leaving
to
his
widow’s
discretion
what
proportion
should
go
to
the
grandchildren
of
his
sister
Victoria
and
what
proportion
should
go
to
“philanthropic
works,
study
and
research
bursaries,
and
hospital
works
bearing
my
name”.
This
would
affect
the
rate
of
duty,
even
if
plaintiff’s
contention
were
adopted
that
Dame
Dagenais
should
be
considered
as
a
usufructuary
only
and
the
valuation
of
her
life
interest
be
calculated
on
an
actuarial
basis
in
the
manner
provided
in
the
Regulations.
In
view
of
the
limitations
placed
by
the
deceased,
however,
on
Dame
Dagenais’
right
to
indicate
how
the
assets
of
his
estate
should
be
distributed
following
her
death,
I
cannot
conclude
that
she
was
given
“a
general
power
to
appoint”
within
the
meaning
of
subsection
3(5)
of
the
Act.
What
she
was
given
was
a
special
power
to
work
out
the
details
of
the
distribution
of
the
assets
of
his
estate
on
the
general
terms
indicated
by
him,
and
in
making
the
distribution
as
she
did
she
was
clearly
carrying
out
his
wishes
in
accordance
with
the
directions
given
in
the
codicil
of
his
will
and
not
exercising
a
general
power
to
appoint
in
accordance
with
her
own
desires.
See
in
this
connection
Montreal
Trust
Company,
Dame
Orian
Hays
Hickson
and
Ralph
Dougal
Yuile
v
MNR,
[1964]
SCR
647;
[1964]
CTC
367;
64
DTC
5230,
where
the
mother’s
will
provided
that
if
the
heir,
her
son,
should
die
childless
his
share
was
to
be
paid
to
his
legal
or
testamentary
heirs
at
his
death.
His
will
appointed
his
widow
and
it
was
held
that
she
took
directly
from
the
mother
and
not
from
him
and
that
as
he
could
not
dispose
of
the
property
to
anyone
but
his
testamentary
heirs
he
did
not
have
a
general
power
of
appointment.
This
finding
does
not
settle
the
matter
in
issue,
however,
which
arises
mainly
from
the
clause
in
the
will,
which
was
unaffected
by
the
codicil,
giving
her
the
right
to
be
the
sole
judge
as
to
whether
she
required
to
use
some
of
the
capital
of
the
estate
because
her
income
was
not
sufficient.
Some
fine
distinctions
have
been
drawn
in
English
jurisprudence
from
somewhat
similar
wording.
In
Re
Pedrotti’s
Will
(1859),
27
Beav
583,
held
that
a
clause
reading
“in
case
anything
should
occur
that
her
income
is
not
sufficient,
she
shall
be
at
liberty
to
go
to
the
principal”
did
not
constitute
a
general
power
of
appointment.
This
was
distinguished
by
Farwell,
J
in
Re
Richards,
Uglow
v
Richards,
[1902]
1
Ch
76,
where
the
wording
was
“And
also
direct
that
in
case
such
income
shall
not
be
sufficient
she
is
to
use
such
portion
of
my
said
real
and
personal
estate
as
she
may
deem
expedient”
on
the
grounds
that
the
words
“in
case
such
income
shall
be
insufficient”
are
merely
introductory,
so
that
the
clause
taken
as
a
whole
means
that
if
the
wife
deems
it
expedient
to
add
anything
to
her
income
she
may
take
it
out
of
capital,
unlike
the
Pedrotti’s
Will
case
(supra)
where
the
contingency
depended
not
simply
on
the
will
of
the
wife,
but
on
the
occurrence
of
some
extraneous
event
not
indicated
by
the
testator.
He
points
out
that
the
word
“sufficient”
may
mean
“sufficient
for
her
wants”
or
“sufficient
for
her
desires”
and
that
since
in
the
Pedrotti’s
Will
case
there
was
nothing
to
indicate
which
meaning
was
intended
the
more
limited
meaning
was
applied.
Halsbury’s
Laws
of
England,
3rd
ed,
Vol
30
at
No
381
states:
A
gift
of
income
for
life,
with
liberty
to
use
the
capital
if
the
income
is
not
sufficient,
creates
a
general
power
to
appoint
the
capital
inter
vivos
(but
probably
not
by
will),
provided
the
word
“sufficient”
means
sufficient
for
the
desires
of
the
beneficiary,
as
opposed
to
sufficient
for
his
needs.
I
believe
that
in
the
interpretation
of
the
clause
we
should
read
it
as
meaning
that
the
income
should
be
sufficient
to
maintain
the
standard
of
living
to
which
she
had
been
accustomed,
and
it
is
for
that
reason
that
I
permitted
evidence
to
be
introduced
as
to
the
manner
of
life
of
the
parties
during
deceased’s
lifetime
and
of
his
widow
following
his
death.
Few
people
have
sufficient
income
for
all
the
extravagances
in
which
they
may
wish
to
indulge,
but
I
believe
that
it
would
be
unreasonably
misinterpreting
the
testator’s
intention
if
the
word
“sufficient”
were
to
be
given
this
connotation,
and
that
what
he
really
intended
was
that
his
widow
should
be
able
to
continue
to
live
in
the
manner
in
which
they
always
had.
It
is
true
that
with
rapid
inflation,
income
which
might
be
sufficient
at
one
time
might
be
insufficient
five
or
ten
years
later,
but
there
is
nothing
in
the
evidence
in
the
present
case
to
indicate
that
at
any
time
the
income
from
deceased’s
estate
was
in
fact
insufficient
for
his
widow’s
needs
and
the
fact
that
she
was
to
be
the
sole
judge
of
the
sufficiency
of
her
income
does
not
in
my
view
create
a
situation
whereby
she
should
be
deemed
to:
be
entitled
to
use
all
the
capital
of
the
estate
without
restraint.
On
the
contrary,
I
believe
that
although
her
right
to
use
the
capital
is
not
subject
to
the
control
or
supervision
of
any
third
party,
she
would
still
be
under
an
obligation
to
use
capital
only
if
she
could
establish
that
her
income
was
insufficient
for
her
normal
and
proper
needs.
She
could
not,
in
my
view,
by
virtue
of
this
clause
appropriate
the
capital
to
herself,
nor
give
it
away
or
dispose
of
it
by
will
(save
in
carrying
out
the
directions
of
the
codicil
which
I
have
already
dealt
with)
and
therefore
she
did
not
have
a
general
power
to
appoint
by
virtue
of
this
clause
either.
Somewhat
similar
clauses
in
various
wills
have
given
rise
to
litigation
in
Canada
also
and
the
question
is
a
difficult
one
as
appears
from
the
jurisprudence.
One
has
only
to
look
at
the
judgment
of
Cartwright,
J
(as
he
then
was)
and
the
dissenting
judgment
of
Locke,
J
in
the
Supreme
Court
case
of
Wanklyn
et
al
v
MNR,
[1953]
CTC
263;
53
DTC
1167,
to
appreciate
the
difficulties
which
have
arisen.
I
am
reinforced
in
the
view
I
have
adopted
by
the
judgment
of
Cartwright,
J
in
that
case
in
which
the
will
of
Mrs
Chipman
gave
her
husband
a
life
interest
in
the
revenue
of
her
estate
and
directed
her
executors
and
trustees
to
pay
to
her
said
husband
from
time
to
time
and
at
any
time
“such
portions
of
the
capital
of
my
estate
as
he
may
wish
or
require
and
upon
his
simple
demand,
my
said
husband
to
be
the
sole
judge
as
to
the
amount
of
capital
to
be
withdrawn
by
him”.
It
would
appear
that
the
words
in
the
present
case
“if
the
income
which
my
wife
enjoys
shall
not
be
sufficient”
impose
more
of
a
limitation
than
the
words
‘‘as
he
may
wish
or
require”
in
the
Wanklyn
case
(supra),
yet
despite
this
and
the
fact
that
Dr
Chipman
did
in
fact
demand
and
receive
substantial
sums
of
capital
during
his
lifetime,
the
finding
of
the
Court
was
to
the
effect
that
the
assessment,
in
so
far
as
Dr
Chipman
was
concerned,
should
be
based
only
on
the
value
at
the
date
of
Mrs
Chipman’s
death
of
the
estimated
net
revenues
from
her
residuary
estate
during
the
remainder
of
his
lifetime
subject
to
adjustment
for
the
amount
of
capital
he
actually
received.
Cartwright,
J’s
judgment
held
at
page
276
[1174]:
In
my
opinion
no
power
to
appoint
any
part
of
the
capital
of
the
residue
by
will
was
given
to
Dr
Chipman.
The
clause
contemplates
the
exercise
of
judgment
by
him
as
to
the
amount
or
amounts
that
he
wishes
to
take
from
capital
and
payment
thereof
to
him
in
his
lifetime.
At
pages
278-9
[1176]
of
the
judgment
the
learned
judge
analyses
the
effect
of
paragraph
2(m)
of
the
Act
which
reads
as
follows:
(m)
‘‘succession”
means
every
past
or
future
disposition
of
property,
by
reason
whereof
any
person
has
or
shall
become
beneficially
entitled
to
any
property
or
the
income
thereof
upon
the
death
of
any
deceased
person,
either
immediately
or
after
any
interval,
either
certainly
or
contingently,
and
either
originally
or
by
way
of
substitutive
limitation,
and
every
devolution
by
law
of
any
beneficial
interest
in
property,
or
the
income
thereof,
upon
the
death
of
any
such
deceased
person,
to
any
other
person
in
possession
or
expectancy,
and
also
includes
any
disposition
of
property
deemed
by
this
Act
to
be
included
in
a
succession;
and
states:
.
.
.
the
question
is
therefore
whether
under
her
will,
upon
her
death,
Dr
Chipman
became
beneficially
entitled
to
that
capital
“either
immediately
or
after
any
interval
either
certainly
or
contingently
and
either
originally
or
by
way
of
substitutive
limitation”.
It
appears
to
me
that
he
did
not.
I
am
of
opinion
that
upon
the
death
of
Mrs
Chipman,
Dr
Chipman
became
beneficially
entitled
to
the
income
from
the
residue
and
the
residuary
legatees
became
beneficially
entitled
to
the
capital
thereof
in
remainder.
I
have
already
indicated
my
view
that
the
legal
effect
of
the
relevant
provisions
of
the
will
of
Mrs
Chipman
is
the
same
under
the
law
of
Quebec
as
under
the
common
law,
and
using
the
terminology
of
the
latter,
the
residuary
legatees
immediately
on
the
death
of
Mrs
Chipman
took
not
a
contingent
but
a
vested
remainder
in
the
capital,
expectant
on
the
death
of
Dr
Chipman,
subject
to
be
divested
in
whole
or
in
part
by
his
exercise
of
the
power
to
take
during
his
lifetime
such
portion
or
portions
of
the
capital
as
he
might
wish.
So
far
as
the
capital
of
the
residue
was
concerned
no
part
of
it
became
vested
in
Dr
Chipman
upon
Mrs
Chipman’s
death
or
under
any
disposition
made
by
her.
No
doubt
upon
his
exercising
the
power
Dr
Chipman
became
entitled
to
the
part
of
the
capital
of
the
residue
in
respect
of
which
he
exercised
it,
and
became
so
entitled
under
Mrs
Chipman’s
will
by
the
operation
of
the
rule
of
law
that
“whatever
is
done
in
pursuance
of
a
power
is
to
be
referred
to
the
instrument
by
which
the
power
is
created,
and
not
to
that
by
which
it
is
executed
as
the
origin
of
the
gift”
(vide
Farewell
on
Powers,
3rd
edition
at
page
318);
but
it
was
only
to
the
extent
that
he
exercised
the
power
that
he
became
beneficially
entitled
to
any
portion
of
such
capital
and
it
was
conceded
that
he
was
liable
to
pay
duty
in
respect
of
such
portion.
The
respondent’s
argument
depends
upon
the
proposition
that
a
person
who
is
given
a
power
over
property
thereby
became
beneficially
entitled
to
such
property
but
in
my
view
this
is
not
the
law
and
no
words
in
the
statute
so
provide.
As
is
pointed
out
in
Halsbury’s
Laws
of
England,
2nd
edition,
vol.
25,
page
515:
“The
creation
of
a
power
over
property
does
not
in
any
way
vest
the
property
in
the
donee,
though
the
exercise
of
the
power
may
do
so;
and
it
is
often
difficult
to
say
whether
the
intention
was
to
give
property
or
only
a
power
over
property.”
I
have
already
indicated
my
view
that
as
a
matter
of
construction
it
is
clear
that
Mrs
Chipman’s
will
gave
Dr
Chipman
no
property
in
the
capital
of
the
residue
but
only
a
power
over
it.
A
different
conclusion
was
reached
by
the
Supreme
Court
in
the
case
of
Montreal
Trust
Company
(Re
Estate
of
Emily
Rhoda
Bathgate,
Deceased)
v
MNR,
[1956]
CTC
146;
56
DTC
1088,
in
which,
however,
the
will
of
her
husband
left
the
residue
of
his
estate
to
his
executors
and
trustees
upon
trust
to
pay
the
net
income
thereof
to
his
wife
with
a
further
provision
“to
pay
to
my
wife
.
.
.
the
whole
or
such
portion
of
the
corpus
thereof
as
she
may
from
time
to
time
and
at
any
time
during
her
life
request
or
desire”.
The
issue
before
the
Court
was
the
taxation
of
the
wife’s
estate
but
it
was
held
that
these
words
in
the
husband’s
will,
even
if
they
did
not
constitute
a
general
power
of
appointment,
made
the
wife
under
subsection
4(1)
of
the
Act
competent
to
dispose
of
the
funds
in
question.
Although
Mrs
Bathgate
never
had
any
control
or
possession
of
any
of
the
assets
of
her
husband’s
estate
and
never
made
any
request
or
expressed
any
desire
to
her
husband’s
executors
to
be
paid
any
of
the
corpus
of
the
estate
nor
did
she
receive
any
portion
of
it,
the
judgment
of
the
Court,
rendered
by
Kerwin,
CJ,
stated
at
pages
148-9
[1090]:
.
.
.,
Mrs
Bathgate
was
“competent
to
dispose’’
of
the
residue
of
her
husband’s
estate
(subsection
(1)(i)
of
Section
3),
because
she
had
a
general
power
to
dispose
of
it
since,
“general
power”
includes
“every
power
or
authority
enabling
the
donee...
to
appoint
or
dispose
of
property
as
he
thinks
fit”
(subsection
(1)
of
section
4).
By
subsection
(4)
of
Section
3
there
was
deemed
to
be
a
succession
in
respect
of
property
where
the
deceased
person
had
at
the
time
of
death
not
merely
the
general
power
or
authority
to
“appoint”,
but
also
to
“dispose
of”
property.
Although
this
subsection
(4)
of
Section
3
was
added
only
in
1952,
the
provisions
of
subsection
(1)
of
Section
4,
stating
who
is
to
be
deemed
“competent
to
dispose”
applies
to
it.
By
the
terms
of
the
trust
the
executors
and
trustees
of
the
husband
were
to
pay
Mrs
Bathgate
“the
whole
or
such
part
of
the
corpus
thereof
as
she
may
from
time
to
time
and
at
any
time
during
her
lifetime
request
or
desire”.
This
power
or
authority
to
“request
or
desire”
is
sufficient
to
bring
her
within
the
terms
of
the
statute.*
This
case
distinguished
the
Wanklyn
case
(supra)
at
page
150
[1090]
where
it
is
stated:
The
decision
in
Wanklyn
v
MNR,
(1953)
2
SCR
58;
(1953)
CTC
263,
is
not
in
conflict
with
this
conclusion:
There
the
majority
of
the
Court
expressed
doubts
as
to
whether,
on
the
proper
construction
of
the
will
of
Mrs
Chipman,
a
general
power
of
appointment
had
been
conferred
on
her
husband,
but
arrived
at
their
conclusion
on
another
basis.
What
was
sought
to
be
assessed
to
succession
duty
was
the
property
over
which
the
Minister
had
argued
the
husband
had
a
general
power
of
appointment,
although
he
had
not
exercised
it
except
with
respect
to
a
small
portion.
The
Minister
sought
to
make
his
estate
liable
as
if
the
power
had
been
completely
exercised.
lt
would
seem
that
this
judgment
could
be
distinguished
from
the
present
case,
however,
(which
it
must
be
remembered
concerns
the
estate
of
Félix
Goyer
and
not
of
Dame
Dagenais)
in
that
the
direction
to
the
executors
in
the
Bathgate
case
(supra)
to
pay
the
wife
during
her
lifetime
whatever
she
might
“request
or
desire”
is
a
wider
power
than
that
given
Dame
Dagenais
in
the
present
will,
which
requires
her
to
apply
the
test
of
sufficiency.
In
the
case
of
MNR
v
Donald
H
F
Black,
Executor
of
the
Estate
of
Elizabeth
Catharine
(Fraser)
Black,
[1969]
CTC
454;
69
DTC
5317,
the
will
was
held
to
create
a
substitution
de
residue
rather
than
a
usufruct.
The
testator
left
the
assets
of
his
estate
to
his
wife
“for
her
use
and
enjoyment,
comfort
and
general
welfare
during
the
remainder
of
her
lifetime”,
providing
how
it
was
to
be
divided
at
her
death.
It
was
held
that
these
words
gave
her
a
limited
power
and
that
the
wife
had
no
right
of
disposal
as
she
saw
fit,
so
that
she
did
not
come
within
the
definition
of
having
general
power
of
appointment
within
paragraph
58(1
)(i)
of
the
Estate
Tax
Act
with
which
that
case
was
concerned,
nor
was
she
competent
to
dispose
of
the
property
within
the
meaning
of
paragraph
3(1
)(a)
or
3(2)(a)
of
that
Act.*
In
the
present
case
it
may
well
be
that,
as
in
the
Black
case
(supra)
the
deceased’s
will
and
codicil
created
a
substitution
de
residuo
rather
than
a
life
interest
or
usufruct.
Certainly,
the
lack
of
detailed
provision
in
the
codicil
for
disposal
of
the
assets
at
Dame
Dagenais’
death,
and
the
right,
even
restricted,
to
use
capital
if
the
income
is
insufficient
create
some
doubt
as
to
the
vested
ownership
of
the
assets
during
her
lifetime
and
make
it
difficult
to
bring
it
within
the
definition
of
“usufruct”
which
is
found
in
Article
443
of
the
Quebec
Civil
Code
as
follows:
443.
Usufruct
is
the
right
of
enjoying
things
of
which
another
has
the
ownership,
as
the
proprietor
himself,
but
subject
to
the
obligation
of
preserving
the
substance
thereof.
A
substitution
may
exist
even
if
the
term
“usufruct”
is
used
(Article
928
Civil
Code).
Article
929
of
the
C/V/7
Code
reads
in
part:
The
disposition
which
creates
the
substitution
may
be
conditional
like
any
other
gift
or
legacy.
Article
952
reads:
952.
The
grantor
may
indefinitely
allow
the
alienation
of
the
property
of
the
substitution,
which
takes
place,
in
such
case,
only
when
the
alienation
is
not
made.
However,
Article
962
reads
in
part:
962.
The
substitute
takes
the
property
directly
from
the
grantor
and
not
from
the
institute.
so
that
even
if
the
will
and
codicil
were
held
to
have
created
a
substitution
de
residuo
this
would
not
have
the
effect
of
making
the
ownership
of
the
property
pass
to
Dame
Dagenais.
This
question
was
dealt
with
by
the
Supreme
Court
in
the
case
of
MNR
v
Edmund
Howard
Smith
and
Montreal
Trust
Co,
[1960]
SCR
478;
[1960]
CTC
97;
60
DTC
1102,
where
the
majority
judgment
by
Chief
Justice
Kerwin
and
Justices
Abbott
and
Taschereau
held:
A
fiduciary
substitution
having
been
created
by
the
testator’s
will,
the
named
legatees
received
the
property
directly
from
the
testator
pursuant
to
Article
962
of
the
Civil
Code
and
consequently
that
property
was
excluded
from
the
wife’s
estate.
The
three
elements
necessary
to
create
a
substitution
were
present
in
the
testator’s
will:
two
successive
benefits
were
conferred,
one
to
the
institute
and
the
other
to
the
substitutes,
and
there
was
to
be
a
period
between
the
enjoyment
of
the
institute
and
the
opening
of
the
substitution.
The
fact
that
the
institute
could
dispose
of
the
property
was
no
obstacle,
as
Article
952
provides
for
a
substitution
de
residuo.
I
have
therefore
reached
the
conclusion
that
Dame
Dagenais’
interest
in
the
estate
should
be
assessed
in
accordance
with
section
35*
of
the
Act
which
reads
as
follows:
35.
The
value
of
every
annuity,
term
of
years,
life
estate,
income,
or
other
estate,
and
of
every
interest
in
expectancy
shall
for
the
purposes
of
this
Act
be
determined
by
such
rule,
method
and
standard
of
mortality
and
of
value,
and
at
such
rate
of
interest
as
from
time
to
time
the
Minister
may
decide,
and
the
value
so
determined
shall
be
deemed
to
be
the
fair
market
value
thereof.
The
balance
of
the
estate
should
be
assessed
as
devolving
directly
from
the
estate
of
the
late
Félix
Goyer,
although
taking
effect
only
at
the
death
of
Dame
Dagenais,
to
the
legatees
named
by
her
in
notarial
deed
of
September
18,
1959
(supra)
giving
detailed
effect
to
the
general
directions
for
its
distribution
set
out
in
the
codicil
to
his
will.
It
is
now
necessary
to
turn
to
the
second
question
dealing
with
the
valuation
of
Lot
101
of
the
Parish
of
Montreal
for
succession
duty
purposes.
This
evaluation
is
not
without
difficulty
as
extraordinary
and
unprecedented
inflation
in
property
values
in
Côte
St-Luc,
where
the
lot
was
located,
took
place
between
1954
and
1956
and
continued
for
several
years
thereafter.
While
there
were
slight
discrepancies
in
the
description
of
the
area
of
the
said
property,
the
best
description
indicates
that
the
portion
of
the
property
between
Côte
St-Luc
Road
and
the
Canadian
Pacific
Railway
Company
track
which
intersected
it
contained
276,648
square
feet
while
the
remainder
of
the
property
north
of
the
railway
track
contained
809,639
square
feet,
making
a
total
of
1,096,287
square
feet
which
defendant’s
expert,
Eugene
Therien,
evaluated
at
500
a
square
foot
or
$548,143.50
which
he
rounds
off
to
$525,000.
Four
different
zonings
were
applicable
to
the
property
in
1956.
To
the
depth
of
100
feet
from
Côte
St-Luc
Road
the
property
was
zoned
for
apartment
houses;
from
there
to
Guelph
Road,
a
roadway
homologated
but
not
yet
built,
it
was
zoned
for
single
family
cottages,
this
portion
having
a
depth
of
about
2,100
feet.
Between
Guelph
Road
and
Kildare
Road,
another
homologated
but
as
yet
unbuilt
street,
a
distance
of
about
800
feet,
it
was
zoned
for
duplexes
and
from
there
to
the
rear
of
the
property,
approximately
another
800
feet,
it
was
zoned
for
industrial
use.
Mr
Therien
gives
a
value
of
$1.25
a
square
foot
for
the
first
portion
zoned
for
apartment
houses,
400
a
square
foot
for
the
single
family
portion,
600
for
the
portion
zoned
for
duplexes,
and
25c
for
the
portion
zoned
for
industrial
use
and
concludes
that
on
this
basis
he
arrives
at
about
the
same
valuation
of
$525,000
as
he
arrived
at
by
applying
an
average
value
of
50c
per
square
foot
to
the
entire
property.
Plaintiff’s
expert,
Romeo
Cadieux,
gives
an
overall
evaluation
of
28c
a
square
foot
or
$10,304
per
arpent
which,
when
applied
to
the
29.95
arpents
total
area
of
the
property
gives
a
value
of
$308,604.80
which
he
rounds
out
to
$308,605.
He
also
breaks
this
down,
not
in
accordance
with
building
zones
but
in
accordance
with
the
areas
on
each
side
of
the
railroad
track,
giving
the
front
portion
between
Côte
St-Luc
Road
and
the
railroad
track
a
valuation
of
.386c
per
square
foot
or
$14,200
an
arpent,
and
the
rear
portion
.245c
per
square
foot
or
$9,000
per
arpent.
Deducting
the
area
represented
by
the
homologated
streets
leaves
an
area
of
978,958
square
feet
for
which
he
works
out
the
average
price
at
.316c
per
square
foot,
arriving
at
a
value
of
$309,350.
The
main
difference
in
the
valuation
arrived
at
by
the
two
experts
results
from
the
fact
that
Mr
Therien
based
his
values
to
a
considerable
extent
on
sales
which
took
place
subsequent
to
the
date
of
deceased’s
death
on
May
16,
1956,
stating
that
the
evaluation
under
the
Dominion
Succession
Duty
Act
should
be
made
in
the
same
manner
as
under
the
Expropriation
Act
and
that
fair
market
value,
being
the
price
at
which
a
willing
and
informed
seller
is
prepared
to
take
from
a
willing
and
informed
buyer,
can
properly
take
into
consideration
sales
after
the
date
in
question,
since
in
a
rapidly
escalating
real
estate
market,
both
the
vendor
and
buyer
would
be
well
aware
that
the
property
was
increasing
rapidly
in
value
and
this
future
potential
would
affect
the
fair
market
value
of
it
at
any
given
date.
On
the
other
hand,
Mr
Cadieux
contended
that
in
evaluating
the
property
for
succession
duty
purposes
no
sales
after
the
date
of
death
should
be
taken
into
consideration.
The
property
was
bought
by
the
late
Mr
Goyer
in
1952
for
$48,000
with
the
buildings
thereon
and
was
sold
by
the
estate
on
November
9,
1959
for
$1,210,000
or
$1.10
per
square
foot.
These
figures
are
given
merely
as
an
indication
of
the
increase
in
property
values
in
the
area,
but
cannot
give
any
indication
as
to
what
the
property
was
worth
on
May
16,
1956.
It
was
assessed
by
the
Town
of
Côte
St-Luc
in
1954-55
and
1956
at
$166,870
on
a
square
foot
basis,
different
values
being
given
to
the
different
areas.
This
evaluation
was
contested
in
Court
by
the
late
Mr
Goyer
who
brought
proceedings
to
declare
the
taxation
roll
null,
which
action
was
never
heard
as
a
result
of
his
death,
but
the
1957
roll
gave
a
value
on
an
acreage
basis
of
$206,325.
These
municipal
valuations
have
little
significance
in
establishing
fair
market
value,
however,
nor
does
the
price
of
55c
a
square
foot
asked
by
the
late
Mr
Goyer
in
the
option
to
Mr
Miller
for
this
property
and
part
of
Lot
99,
which
option
was
not
accepted
for
the
reasons
stated
(supra),
and
in
any
event
proof
of
this
option
was
not
made
by
the
parties.
Under
the
Dominion
Succession
Duty
Act
it
is
the
“fair
market
value
of
the
property”
which
is
to
be
assessed—see
subsection
34(1)
which
reads
as
follows:
34.
(1)
Subject
to
the
provisions
of
this
Act,
the
fair
market
value
of
the
property
included
in
any
succession
for
the
purpose
of
duty
shall
be
ascertained
by
the
Minister
in
such
manner
and
by
such
means
as
he
thinks
fit,
and,
if
he
authorizes
a
person
to
inspect
any
property
and
report
to
him
the
value
thereof
for
the
purposes
of
this
Act,
the
person
having
the
custody
or
possession
of
that
property
shall
permit
the
person
so
authorized
to
inspect
it
at
such
reasonable
times
as
the
Minister
thinks
necessary.
Plaintiff,
however,
invokes
subsection
5(2)
which
reads
as
follows:
9.
(2)
Subject
to
the
provisions
hereinafter
in
this
Act
contained
as
to
accounting
for
and
payment
of
duties
upon
or
in
respect
of
interests
in
expectancy,
the
duty
payable
by
each
successor
shall
not
be
subject
to
any
increase
or
decrease
by
reason
of
appreciation
or
depreciation
in
the
value
of
the
property
included
in
a
succession
after
the
date
of
death
or
by
reason
of
maladministration
or
any
other
cause
whatsoever.
Defendant’s
argument
is,
of
course,
that
no
attempt
is
being
made
to
assess
the
property
on
the
basis
of
its
appreciation
in
value
after
death,
but
that
in
determining
the
fair
market
value
at
death,
values
which
the
property
would
have
had
shortly
after
death
can
be
looked
at
in
determining
what
a
willing
vendor,
aware
of
the
trend
in
property
values
in
the
area,
would
have
been
willing
to
take
for
same
at
the
date
of
his
death.
The
fact
that
there
is
some
distinction
between
the
evaluation
of
property
for
expropriation
purposes
and
the
evaluation
for
tax
assessment
purposes
is,
however,
made
clear
by
the
judgment
of
Rinfret,
CJ
in
the
case
of
Sun
Life
Assurance
Co
of
Canada
v
The
City
of
Montreal,
[1950]
SCR
220,
dealing
with
municipal
evaluations
where
he
states
at
page
224:
I
need
not
insist
on
the
point
that
a
municipal
valuation
for
assessment
purposes
is
not
to
be
made
in
accordance
with
the
rules
laid
down
with
regard
to
the
valuation
of
a
property
for
expropriation
purposes.
One
main
ground
why
such
a
course
should
not
be
followed
is
that
the
expropriation
of
a
property
means
the
permanent
divesting
of
the
owner
and
should
legitimately,
therefore,
take
into
account
the
present
value
and
all
the
prospective
possibilities
of
the
property,
while
the
municipal
valuation
is,
generally
speaking,
only
made
for
one
year,
or,
in
the
case
of
the
City
of
Montreal,
for
three
years,
with
certain
provisions
for
modification
if
certain
events
happen,
such
as
alteration,
improvement,
fire,
etc.
The
rule
was
laid
down
by
Lord
Parmoor
in
Great
Western
and
Metropolitan
Railway
Companies
v
Kensington
Assessment
Committee
([1916]
1
AC
23
at
54),
that
in
such
a
case
“the
hereditament
should
be
valued
as
it
stands
and
used
and
occupied
when
the
assessment
is
made.”
In
the
yearly
valuation
of
a
property
for
purposes
of
municipal
assessment
there
is
no
room
for
hypothesis
as
regards
the
future
of
the
property.
The
assessor
should
not
look
at
past,
or
subsequent
or
potential
values.
His
valuation
must
be
based
on
conditions
as
he
finds
them
at
the
date
of
the
assessment.
In
particular,
in
the
present
case,
there
was
no
ground
for
considering
any
other
condition,
as
no
suggestion
of
any
kind
appears
in
the.
record
that
there
was,
throughout
the
period
of
assessment,
a
prospect
of
any
change.
That
this
does
not
discard
the
fair
market
value
approach
however
appears
from
the
judgment
of
Kerwin,
J
in
the
same
case
where
he
states
at
page
229:
The
rule
applicable
in
determining
compensation
in
expropriation
cases
is
not
that
to
be
followed
in
municipal
assessment
cases
where
the
land
and
buildings
are
to
be
assessed
at
their
value,
or
real
value,
or
actual
value.
The
test
is
an
objective
one
which
in
many
cases
may
be
applied
by
seeking
the
exchange
value
or
the
value
in
a
competitive
market.
The
use
in
expropriation
proceedings
of
prices
paid
in
comparable
sales
after
the
date
of
an
expropriation
was
approved
in
the
Supreme
Court
case
of
Tabco
Timber
Limited,
I
M
Sherwin
Limited
and
Kennedy
Holdings
Ltd
v
Her
Majesty
the
Queen,
[1971]
SCR
361.
This
case
discussed
the
rules
for
evaluation
stated
by
Guy,
JA
in
Duthoit
v
Province
of
Manitoba
(1965),
54
DLR
(2d)
259,
where
he
stated
at
page
266:
It
is
sufficient
to
say
that,
broadly
speaking,
the
following
rules
must
be
observed:
1.
The
value
to
be
placed
on
the
land
taken
is
the
value
to
the
owner,
not
the
taker;
2.
The
value
must
be
on
the
basis
of
the
highest
and
best
use
of
the
property
taken;
3.
The
value
is
the
value
as
at
the
date
of
expropriation;
4.
The
appraiser
must
take
into
account
the
potential
of
the
property
at
the
time
of
the
taking.
This
statement
was
approved
by
Cartwright,
J,
as
he
then
was,
who
delivered
the
reasons
of
the
Court
on
the
appeal
in
the
Duthoit
case
[1967]
SCR
128
at
131.
The
Tabco
judgment
also
refers
to
the
Supreme
Court
judgment
in
the
case
of
Roberts
and
Bagwell
v
The
Queen,
[1957]
SCR
28,
where
it
is
stated
at
pages
36-37:
In
my
view,
evidence
of
a
sale
after
the
enactment
can,
in
the
absence
of
special
circumstances,
be
relevant
to
the
value
prior
to
the
enactment.
The
sale
must
be
shown
to
be
as
free
in
all
respects
from
extraneous
factors
such
as
prior
sales
and
made
within
such
time
as
the
evidence
shows
prices
not
to
have
changed
materially
from
those
before
the
critical
date.
In
other
words,
the
mere
circumstance
of
the
sale
being
before
or
after
a
particular
date
cannot
nullify
the
relevance
of
subsequent
sales
while
the
general
market
conditions
have
remained
the
same.
The
rule
should
allow
the
Court
to
admit
evidence
of
such
sales
as
it
finds,
in
place,
time
and
circumstances,
to
be
logically
probative
of
the
fact
to
be
found.
(Italics
mine.)
Martland,
J
in
the
Tabco
case
states
that
the
essence
of
this
quotation
is
the
sentence
which
says
“The
rule
should
allow
the
Court
to
admit
evidence
of
such
sales
as
it
finds,
in
place,
time
and
circumstances,
to
be
logically
probative
of
the
fact
to
be
found”’.
In
applying
this
jurisprudence
to
the
present
case,
it
must
be
noted
that,
while
the
Roberts
and
Bagwell
quotation
admits
evidence
of
sales
after
the
enactment
(that
case
dealt
not
with
an
expropriation
but
with
-a
claim
for
injurious
affection
arising
from
the
enactment
of
a
restrictive
building
regulation)
it
does
require
that
such
sales
must
have
been
“made
within
such
time
as
the
evidence
shows
prices
not
to
have
changed
materially
from
those
before
the
critical
date”
and
refers
to
the
“relevance
of
subsequent
sales
while
the
general
market
conditions
have
remained
the
same”.
That
is
certainly
not
the
case
in
the
present
proceedings.
Reference
might
also
be
made
on
the
question
of
the
use
of
the
market
value
approach
in
taxation
as
well
as
in
expropriation
cases
to
the
case
of
The
King
v
Charles
J
Jones,
ex
parte
New
Brunswick
Railway
Company,
In
re
The
Assessors
of
the
Parish
of
Kent
in
the
County
of
Carleton,
[1950]
SCR
286,
where
it
was
held
at
page
289
in
upholding
the
judgment
appealed
from
that
the
judge:
..
.
properly
construed
the
Statute
to
provide
for
valuation
on
a
market
basis,
as
between
a
willing
seller
and
a
willing
purchaser,
each
exercising
a
reasonable
judgment,
having
regard
to
all
elements
and
potentialities
of
value
as
well
as
of
all
risks,
and
reducing
them
all
to
a
present
worth:
Montreal
Island
Power
Co.
v
The
Town
of
Laval
des
Rapides
([1935]
SCR
304).
While
I
therefore
do
not
conclude
that
evidence
as
to
any
sales
after
the
date
of
deceased’s
death
must
be
excluded
altogether,
the
prices
they
disclose
must
be
applied
with
extreme
caution
as
the
market
was
far
from
stable
but
was.
fluctuating
almost
daily.
Mr
Therien’s
report
disclosed
that
the
population
of
Côte
St-Luc
increased
from
2,500
in
1954
to
3,500
in
1955,
5,855
in
1956,
6,990
in
1957
and
by
1959
had
reached
12,000.
Market
prices
for
property
in
the
area
reflected
this
escalation.
Plaintiff’s
expert,
Mr
Cadieux,
augmented
1954
prices
of
20-21
c
a
square
foot
by
40%
in
two
years
to
arrive
at
his
figure
of
28c
a
square
foot,
basing
the
40%
increase
on
his
experience.
One
of
the
most
significant
sales
was
referred
to
by
the
experts
for
both
parties,
since
it
included
part
of
Lot
104
immediately
adjacent
to
the
subject
property,
as
well
as
part
of
Lot
82
further
to
the
east
and
closer
to
the
developed
area
of
Hampstead,
and
took
place
almost
simultaneously
with
the
date
of
the
death
of
Félix
Goyer,
Mr
Cadieux
giving
the
date
as
May
17,
1956
and
Mr
Therien
as
May
15,
which
was
probably
the
date
of
the
actual
deed.
The
price
worked
out
at
38c
a
square
foot,
but
Mr
Cadieux
points
out
that
the
same
day
the
portions
of
Lot
82
purchased
were
sold,
the
prices
totalling
$550,000
which,
when
deducted
from
the
$630,000
paid
for
the
whole
property
which
included
the
portions
of
Lot
104
and
Lot
82,
leaves
$80,000
for
the
553,330
square
feet
of
Lot
104
or
a
value
of
only
.145c
per
square
foot.
He
neglects
to
mention,
however,
that
the
same
portion
of
Lot
104
was
resold
a
month
later
on
June
14
at
a
price
of
55c
a
square
foot.
Mr
Cadieux
also
relies
on
a
sale
in
April
1954
of
Lot
100
immediately
adjacent
to
the
subject
property,
although
approximately
twice
its
size
for
16c
a
square
foot.
He
sets
aside
a
sale
made
on
March
15,
1955
of
part
of
Lot
95
for
50c
a
square
foot
because
it
is
in
the
high
rise
apartment
zone,
making
it
substantially
more
valuable,
since
only
a
small
portion
of
the
subject
property
is
in
this
zone,
and
this
distinction
appears
justifiable.
He
also
omits
to
mention
the
sale
of
another
part
of
Lot
104
in
1954
to
the
school
board
for
50c
a
square
foot.
This
property
however
had
already
been
subdivided
and
was
for
an
area
of
only
170,477
square
feet.
Even
so,
this
appears
to
be
an
excessive
price
for
that
date.
Mr
Therien
refers
to
two
sales
of
portions
of
Lot
100
in
August
1957
for
61c
and
46c
respectively,
and
a
further
sale
of
a
portion
of
it
in
February
1958
for
460.
These
sales
are
in
my
view
too
long
after
the
date
in
question,
however,
to
attach
too
much
weight
to
them.
Nearly
all
the
sales
referred
to
by
both
experts
are
from
various
investment
corporations
to
building
corporations
and
the
nature
of
some
of
these
transactions
and
the
prices
paid
gives
some
reason
to
doubt
that
the
parties
were
in
all
cases
acting
at
arm’s
length
so
as
to
give
a
true
picture
of
market
value.
A
good
example
of
this
is
the
sale
of
part
of
Lot
104
and
part
of
Lot
82
already
referred
to
by
one
Aime
Goyer
et
al
to
Stirling
Investment
Corporation
for
38.3c
a
foot
followed
by
a
sale
the
same
day
by
Stirling
Investment
Corporation
to
Planned
Homes
inc.
of
part
of
Lot
82
for
63c
a
foot,
and
a
third
sale
the
same
day
by
Planned
Homes
Inc.
to
Stirling
Investment
Corporation
of
what
appears
to
be
another
part
of
Lot
82
for
19c,
followed
a
month
later
by
a
sale
from
Joel
Investment
Corporation
and
Stirling
Investment
Corporation
to
York
Construction
of
part
of
Lot
104
for
55c.
The
names
Stirling
Development
Corporation
(which
one
may
infer
to
have
some
connection
with
Stirling
Investment
Corporation),
Glenbrook
Homes
Inc
and
Westminster
Homes
Inc
appear
in
a
number
of
the
purchases
and
sales
of
parts
of
Lot
100
in
1957
and
1958.
Nearly
all
these
sales
were
evidently
of
a
speculative
nature.
With
all
this
conflicting
evidence
and
in
view
of
the
rapidly
escalating
prices,
it
is
difficult
to
arrive
at
the
true
market
value
of
the
property
in
question
as
of
the
date
of
death.
After
a
careful
examination
of
all
the
sales
cited
by
both
parties,
however,
I
have
reached
the
conclusion
that
the
figure
of
28c
reached
by
Mr
Cadieux
is
too
low,
being
based
primarily
on
1954
values
escalated
by
an
arbitrary
figure
of
40%,
whereas
1956
sales
indicate
the
property
to
be
worth
substantially
more
than
this.
On
the
other
hand
I
believe
that
Mr
Therien’s
conclusion,
which
is
based
to
a
substantial
extent
on
sales
in
the
latter
part
of
1956
and
in
1957
and
1958
leading
to
his
evaluation
of
50c
a
square
foot,
is
somewhat
too
high.
After
a
careful
study
of
all
the
evidence
before
me
I
have
come
to
the
conclusion
that
the
fair
market
value
of
subject
property
as
of
the
date
of
deceased’s
death
should
be
fixed
at
400
a
square
foot
or
a
total
of
$438,514.80
which
I
will
round
off
at
$440,000.
The
question
of
the
interest
to
be
charged
also
gives
rise
to
some
difficulty
and
cannot,
I
believe,
be
settled
on
the
information
before
the
Court.
Interest
commences
to
run
six
months
after
death
and
the
return
was
duly
filed
within
this
period
on
November
14,
1956.
In
this
return
the
figure
of
$90,000
was
shown
as
the
value
of
the
property
in
question
which
I
have
found
to
be
far
too
low.
There
is
a
figure
on
the
first
page
of
the
return
under
the
heading
of
‘‘Minister’s
figures”
indicating
duties
were
claimed
in
the
amount
of
$353,937.45.
This
is
apparently
the
assessment
of
July
4,
1957
which
assessment
was
not,
however,
produced
and
resulted
from
an
increase
in
the
value
of
the
property
by
the
Minister
to
$200,000,
still
considerably
less
than
what
I
have
found
it
should
have
been
assessed
at.
On
the
other
hand,
the
estate
was
apparently
assessed
on
the
basis
that
the
entire
assets
should
be
considered
as
having
passed
to
the
widow
Dame
Dagenais,
which
conclusion
I
have
rejected.
In
its
declaration,
plaintiff
asks
that
all
interest
be
cancelled
from
the
period
commencing
on
the
day
when
the
duties
established
by
the
original
assessment
were
paid,
but
no
proof
was
made
as
to
the
date
of
this
payment.
A
period
of
2
/2
years
elapsed
before
the
new
assessment
of
January
14,
1960
and
it
was
in
this
assessment
that
a
credit
was
shown
of
$192,233.93
for
amounts
paid
on
account.
The
Minister
continued
to
assess
the
entire
estate
as
if
it
were
passing
to
Dame
Dagenais
and
also
now
evaluated
the
property
at
$600,000,
more
than
I
have
found
to
be
its
proper
value
at
the
date
of
death,
so
this
assessment
was
erroneous
on
both
counts
and
it
would
appear
unreasonable
to
collect
interest
based
on
the
executor’s
refusal
tO
pay
an
erroneous
assessment.
This
was
appealed
to
the
Minister
on
both
counts
on
April
11,
1960
and
it
was
not
until
over
four
years
later,
on
August
31,
1964,
that
the
Minister
made
a
decision
on
this
appeal
reducing
the
property
valuation
from
$600,000
to
$525,000,
which
is
still
above
the
figure
which
I
have
fixed,
and
at
the
same
time
the
assessment
was
ratified
in
all
other
respects.
Again,
the
executors
would
seem
to
be
within
their
rights
in
refusing
to
pay
interest
based
on
this
assessment.
They
brought
a
notice
of
dissatisfaction
contesting
this
decision
on
September
22,
1964
and
this
time
nearly
five
years
elapsed
before
the
Minister
replied
on
July
10,
1969
confirming
it
in
all
respects.
The
delay
from
the
filing
of
the
return
on
November
14,
1956
until
July
4,
1957
for
the
making
of
the
initial
assessment
may
not
have
been
excessive
in
view
of
the
substantial
size
of
the
estate
and
variety
of
its
assets,
so
as
to
constitute
an
infringement
of
section
22
of
the
Act
requiring
the
Minister
to
examine
the
return
with
“all
due
despatch”.
However,
the
delay
of
2V2
years
until
January
14,
1960
before
the
Minister
decided
to
increase
the
valuation
of
the
property
to
$600,000,
was
not
explained
but
would
appear
to
be
motivated
by
the
rapid
increase
of
the
value
of
the
property
in
the
interval
as
established
by
the
sale
price
obtained
by
the
executors
for
it
in
1959,
which
increase
in
value
was
not,
however,
a
factor
which
the
Minister
was
entitled
to
take
into
consideration
in
establishing
the
value
as
of
the
date
of
death.
The
subsequent
delays
of
4
/2
years
and
5
years
respectively
following
the
notice
of
appeal
and
notice
of
dissatisfaction
before
the
Minister
made
his
decision
in
each
case
are
even
harder
to
justify,
so
that
it
would
appear
that
plaintiff
has
a
very
real
grievance
with
respect
to
interest
charges
which
might
justify
the
application
by
the
Court
of
section
45
if,
in
fact,
plaintiff
can
establish
that
it
suffered
prejudice
by
the
accumulation
of
interest
charges
resulting
from
these
excessive
delays.
On
the
other
hand,
it
must
be
borne
in
mind
that
plaintiff
had
in
the
interval
the
use
of
any
sums
which
it
may
be
called
upon
to
pay
as
a
result
of
this
judgment
in
excess
of
the
amount
already
paid
on
account
of
duties,
and
to
the
extent
that
any
such
additional
duties
result
from
it
having
declared
a
value
of
$90,000
for
the
property,
which
the
Court
has
now
evaluated
at
$440,000
it
should
be
liable
for
the
interest
on
these
duties.
Before
a
final
decision
on
the
question
of
interest
can
be
made,
therefore,
it
is
necessary
that
the
matter
be
returned
to
the
Minister
for
reassessment
on
the
basis
that
Lot
101
should
be
evaluated
at
$440,000,
that
the
interest
of
Dame
Dagenais
in
the
estate
should
be
considered
as
a
life
interest,
the
value
of
same
being
calculated
in
accordance
with
section
35
of
the
Act,
and
that
the
residue
of
the
late
Félix
Goyer’s
estate
should
be
assessed
on
the
basis
of
$120,000
being
distributed
to
his
deceased
sister’s
twelve
grandchildren
with
the
balance
left
for
religious,
educational
and
charitable
purposes.
As
a
result
of
this
reassessment
it
will
be
possible
to
establish
what
duties
were
properly
due
and
payable
and
after
comparing
this
with
the
sum
actually
paid
and
establishing
the
date
of
such
payment,
reach
a
conclusion
on
the
question
of
interest,
at
which
time
the
parties,
if
they
cannot
agree
on
same,
may
speak
to
this
matter.
Costs
of
the
present
proceedings
shall
be
in
favour
of
plaintiff.
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